In brief
- MicroStrategy has made a $133 million profit on its Bitcoin investment so far.
- Square has also enjoyed a profitable return of $18 million.
- Both firms took a risk investing in so much Bitcoin, but for now that risk is paying off.
MicroStrategy and Square have made 32% and 38% profits respectively, on their Bitcoin investments to date. These profits come at a time when the cryptocurrency’s price continues to rise above $14,000—a value not seen since January 2018.
MicroStrategy and Square have become two of Bitcoin’s flagship institutional investors, and the fact both companies have experienced above 30% return on their investments tells us that while these firms took a huge risk by investing in such a risky asset, it has paid off—for now.
MicroStrategy invested a total of $425 million in Bitcoin spread over two major Bitcoin purchases in August and September of this year. It invested at an average purchase price of $11,111.
Bitcoin’s price increase has seen a net gain of $133 million for MicroStrategy, with the total value of its Bitcoin currently at $558 million. Michael Saylor, CEO of MicroStrategy, has maintained that Bitcoin is digital gold and plans to stick with the invesment for the longterm.
Square followed MicroStrategy’s lead, with a $50 million investment into Bitcoin in October. Square has made an $18 million profit on its Bitcoin investment to date, with the total value of its Bitcoin holdings now at $68 million.
“We believe that Bitcoin has the potential to be a more ubiquitous currency in the future,” said Amrita Ahuja, Square’s chief financial officer at the time. She added that as Bitcoin “grows in adoption, we intend to learn and participate in a disciplined way. For a company that is building products based on a more inclusive future, this investment is a step on that journey.”
A step that, on reflection, was exceptionally profitable.